Calculate interest coverage ratio for real estate investments and properties
Enter EBIT (earnings before interest and taxes) and interest expenses. The calculator divides EBIT by interest to show how many times you can cover interest payments.
With $500,000 EBIT and $150,000 interest expense, your ICR is 3.33x, showing strong ability to service debt.
2.0x or higher is considered healthy, meaning earnings are twice the interest expense. Below 1.5x indicates potential difficulty servicing debt.
ICR divides EBIT by interest only; DSCR divides NOI by total debt service (principal + interest). Both measure debt servicing ability.
Company isn't earning enough to cover interest payments, raising serious financial concerns. May need to restructure debt or improve operations.